Troy Senik: Deliver us from the Postal Service monopoly

Postmaster General Patrick R. Donahoe poses with a mailbox from the early 1900's during an interview at his office at U.S. Postal Service Headquarters in Washington, Aug. 1, 2013. ASSOCIATED PRESS FILE PHOTO

Because there is no greater source of peer pressure for America's adolescents than postage, the United States Postal Service recently recalled stamps from its “Let's Move” collection for depicting what passes for obscenity in a nanny state. One child was portrayed skateboarding without kneepads. Another was doing a cannonball into a swimming pool. A third misguided youth was rendered doing a headstand without a helmet (which invites the question of whether the real theme of the stamps was “things that make Mike Bloomberg die a little inside”).

Were that the USPS was so risk-averse when it comes to its business model.

In a federal government that expands like kudzu – rapidly, indiscriminately and with virtual immortality – the Postal Service has the rare distinction of being a program that receives explicit authorization from the Constitution. That it is legally permissible for government to perform this function, however, does not mean that it is especially plausible that it can do it well.

Like all monopolies, the Postal Service has long suffered from institutional gout – it is arthritic because it is pampered. That has made it languid in responding to changes in the marketplace, such as the fact that we occupy an age where the handwritten letter is an exercise in rococo symbolism rather than the staple of social life it once was. That point has presumably been driven home by the fact that the volume of first-class mail declined by one-third from 2000 (when the digital revolution was already underway) to 2012. Running the Postal Service today is like selling buggy whips during the rise of the automobile.

That difficulty is compounded by the fact that the USPS operates in the worst of all possible worlds, functioning as a nominally autonomous agency but still subject to direction from Congress. As such, it is subject to the vagaries of the marketplace but often powerless to combat them.

Despite the fact that the USPS is currently losing money at the rate of $25 million a day, the legislative branch refuses to let it cut spending that yields political dividends. Last year, Congress blocked a Postal Service initiative to close over 3,600 low-performing post offices (the agency says its 4,500 worst locations average $52 in transactions a day). The upshot, however, would be lost government jobs, which creates a consensus on Capitol Hill similar to the one that used to permeate debates about military base closures – “the system must be reformed ... in everybody else's district.”

Of all the sources of the agency's fiscal hemophilia, none is greater than the requirement that the Postal Service prefund the health benefits that it provides for retired employees. On September 30, the USPS defaulted on a $5.6 billion payment towards those expenses, the third time in three years that it has come up short. A few days earlier, Postmaster General Patrick Donahoe told a Senate committee that the Postal Service would be down to five days' worth of cash by the middle of this month.

Many of the proposals to staunch the bleeding only double down on the agency's pathologies. The USPS has proposed raising stamp prices to 49 cents (at the same time that it's paying a futurist more than $500,000 to devise strategies to combat the decline in stamp usage). This would represent a 10 cent hike in the span of 8 years, nearly doubling the previous rate of increase. At the same time, the Postal Service has also proposed eliminating Saturday delivery. Nothing rehabilitates a struggling business like higher prices and less convenience.

As Washington considers how to save the Postal Service, it ought to cast its eyes toward Europe, where mail delivery is one of the few areas where privatization is regnant. Late last week, Britain sold off the majority of its Royal Mail to the tune of $2.75 billion. Similar reforms have been made in Germany, the Netherlands, Belgium and Austria.

Critics regularly offer the vague objection that privatization is risky. Nothing, however, could be riskier to the Postal Service than the status quo in which it inches ever closer to insolvency.

WRITE A LETTER TO THE EDITOR
Letters to the Editor: E-mail to letters@ocregister.com.
Please provide your name, city and telephone number (telephone numbers will not be published).
Letters of about 200 words or videos of 30-seconds
each will be given preference. Letters will be edited for length, grammar and clarity.

User Agreement

Keep it civil and stay on topic. No profanity, vulgarity, racial
slurs or personal attacks. People who harass others or joke about
tragedies will be blocked. By posting your comment, you agree to
allow Orange County Register Communications, Inc. the right to
republish your name and comment in additional Register publications
without any notification or payment.